how is kind of a recipe for you get wages up and this is a recipe for why janet yellen -- it was easier for her to say i'm going to run the economy hot and let labor input recover. it might be tougher for jay powell to do that. david: thank you both very much for being here. you can find all the charts we just used and more by running gt tv on your terminal. coming up, more on the latest development's in the u.s.-china trade war with the u.s.-china business council vice president. live from new york, this is bloomberg. ♪

have a better understanding under chair powell than you did under chill yellen -- chair yellen?ink it will be very similar. he will look at the data, analyze what is going on, and inflation is going to remain meek near-term. longer-term, the u.s. inflation is going to be low and that is going to be kept down by all of the cyclical structural impacts of low-cost providers, the amazon of this world, and low inflation globally. inflationimited across areas like japan and that is going to weigh down global inflation. they are not want to feel they have to go any quicker, i think they are going to look through those. jon: the applet numbers are so good, that cannot be a problem. >> it is not a problem. you can have real growth that is ok, low inflation. it is a goldilocks kind of economy where you do not have runaway inflation and you do not have an employment problem. the boxes witho short, sharp questions with quick answers. inverts two tens curve before the end of the year, yes or no? >> no. >> no. >> no. jon: have we seen the lowest unemployment curve of the cycle? >> no. >> no.

. >> is it fair to say that many in the gop had been critical of the yellen fed >> they had been. >> putting too much money. >> for just the opposite, keeping rates too low for too long. >> in qe 3, 4, 5, whatever it was. and indeed they wanted to see -- >> higher rates. >> return to more normalized policy. >> yes. >> seems that they've found a way to bring both sides together with gradual rate hikes and not necessarily get that same kind of criticism they had previously president trump has appointed very centrist people to the board. people who have talked about fed independence, who understands the value of independence. i don't think there's an issue of the people he has appointed bowing to his whims. >> he is not an orthodoxed politician or republican, as we've found. >> really? >> in any way, we've found. >> you don't say. >> thanks, bob >>> our nextguest is urging th president to reconsider and how businesses in his state are being hurt and what he wants the president to do about it it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is

he said you hold the keys. >> i think we can remember a similar line of questioning at janet yellen yellen would spend a lot of time acknowledging the pain that goes along with a stagnant wage economy. but not -- also not give a satisfying answer. you know, powell just said not my area. honestly, we don't have the levers to pull even if we wanted to >> right >> they're a central banker, not a central psychologist >> his point was these problems go back to educational achievement in this country that flattened out in the '70s. a lack of tech investment post-crisis. his words, that's casting a long shadow over wages. >> and they're global. most of these issues are long-term global trends. many people in congress just don't get that either. >> rick, mike, thank you it's noon. dow is up 30 let's get to the half. >>> thank you very much, carl. welcome to "the half time report." we begin with fed chair jay powell delivering his semi-annual testimony before the senate banking committee the fed chair saying growth in the second quarter considerably stronger than in q1. that inflation will remain n

sense,ractical, in a then we had under chair yellen.t's a difficult exercise, and i'm not guaranteeing it will be done this time, but what is interesting is that we have a fed that will gradually raise interest rates and gradually try to level off inflation around its target of 2%, which we are pretty close to right now. the economy is produced from. my fear is that we are probably thinking in terms of economic momentum, and as we gradually start to slow, the fed my desire to raise rates a little bit more and perhaps a little bit too much, which i think is a large part of why we had seen the yield curve flattening over the past few weeks and months. pessimistice reasonable argument is that we end up getting a short-term rise in inflation, leading gradually to longer-term inflation, does the fed has the ability to respond to that sort of delicate scenario, or is that not coming forth with monetary policy? you're right in highlighting the risk of a stagflationary environment. you have higher inflationary pressures from the tear, an enviro

when janet yellen raised the rates the first time i thought she was doing that to show the world she couldn't be pushed around. the result was a crash in the market. wall street responded. we have seen this push-pull with wall street and the fed. now the president wants to get into the mix. >> you see the fed is always getting pressure different interest groups and certainly the president doesn't want a different standard for republican administrations than democratic administrations. he wants to make sure he's treated fairly, and he's one to assert his fair treatment. >> the american people being treated fairly. everybody gets worried about the banks failing. and being beneficial to them. what about being beneficial to the american people? that's the reason trump got elected. i can guarantee you most of people in middle america, finally somebody is saying can we call them out on this behavior? >> we had a pretty good session today. at one point the futures are down, and the hysteria. the commentators, any time president trump does anything, i feel like they are trying to talk us dow

. >> it was something janet yellen put in as a monetary policy indicator at her first press conference in 2014. she wanted to see rage -- wage increases at 3-4%. one of the difficult to explain things, we have had a slowdown in productivity growth. if you have slow productivity growth it is hard to get fast wage increases. that is going to squeeze profits or result in higher prices. the labor market has tightened. wage increases are going up slowly but actually for the economy as a whole it is good wage increases are not going up too quickly. to raise force the fed rates at a faster pace and that is something i don't think the fed wants to do right now. vonnie: we are seeing a lot of turnover as well. what does that mean? do we know yet? rate is reasonably high. marketsee a tight labor and they're willing to change jobs. in the insured unemployment rate which has been a record low of 1.2%. very low unemployment. we also see companies are reluctant to let go of labor claims around 225,000. a record low share of the labor force. there are plenty of jobs. we know there were more jobs need

to actually care kerber in a rematch of the twenty sixteenth final kerber made quick work of the yellen now hasta penco winning the match six three six three in just over an hour is the second time the german has been to the final at the all england club. and in fact the football world cup in russia has delivered another thrilling clash croatia beat england in the semifinal and the country is now heading to its first ever world cup final they are recovered from an early goal to england to a set up a final showdown with france on sunday. being limping crew asia under pressure from the get go forcing a foul on dilly dally and giving england their first chance on goal kiran chippy a with a perfectly timed free kick one new for the three lions in the fifteen minutes. it took courage into the sixty eight minutes of break and wins defense even perish it's far more determined to get the ball than carl was one all. and despite multiple chances there were no more goals in the regular ninety minutes the game heading into extra time. in the one hundred ninety minutes marmande you catch with the de

as late as december, janet yellen in her last press conference dismissed it, then in the last minutes we got from them you saw clearly now there are several members starting to worry about it he may change the tone ever so slightly but i suspect that it's going to be certainly not a clear message. >> you mentioned janet yellen's last press conference. i think it was the last question she answered a distinction between correlation and causation. do you think that this idea, you go back over the last 50, 60 years, you look at that flattening yield curve, that inversion as a canary in the coal mine? do you buy this idea that this time around it's not a useful anticipatory tool? >> i don't if you -- since 1960, it has seven out of eight times of the recessions we've had an inversion before it doesn't mean the inversion of the curve triggers recession that could be a third element that sort of drives two things at the same time when you get that degree of correlation or coincidence, you have to sit up and watch that said, of course the term is low, things are going on with the balance shee

janet yellen brought up in her last press conference that based on yesterday's testimony, where do you that? >> i think he stands on outsourcing the issue of what is a neutral rate to the market a child spread in the 20, 30, 40 basis point range for twos and tens is normal for this stage of the cycle. you can go back to the '90s and '80s and before that what stands out is not the flatness of the curve but how long the fed needed to keep the yield curve so steeply positive to reliquefy the banking system now we're at a point where this will trend here for a while. then the fed will go a step too far, the curve will revert, recession will come six, eight months later, but he's happy to watch the curve. when he sees the curve getting too flat, that will be the signal to him. >> we have to leave it there thank you very much for your time. that's it for today's show i'm willem marx. "worldwide exchange" is coming up next. - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep

he talked about interest rates and former fed chair janet yellen back when he was out on the campaign trail. >> janet yellen is highly political and she's not raising rates for a specific reason because obama told her not to. >> she's keeping them artificially low to get obama retired. watch what's going to happen. it's a very serious problem. i think it's very political. i think she's very political. and to a certain extent, she should be ashamed of herself. i used to hope that the fed was independent and the fed is obviously not independent. it's obviously not even close to being independent. >> the fed declined to comment on the president's breach of protocol today. former dallas fed president richard fisher did weigh in telling cnbc "no president should interfere with the workings of the fed. were i chairman powell, i would ignore the president and do my job, and i am confident he will do just that." coming up, the one word in the middle of a speech the president was giving today that received special attention when we come back. >>> last thing before we go tonight, is something t

first time that donald trump has criticized the fed or the fed chairperson you remember back janet yellen in 2016 during the campaign, the president was very, very critical of her, suggesting that she should be ashamed of herself for keeping interest rates so low in order to help barack obama during a presidential year help his story on the economy. this is not a man, donald trump, whether president trump or donald trump shy about airing his views and it's not something that we've seen other presidents do recently and it's not something that this president has shied away from at all we'll see the full tape of the full interview tomorrow on squawk box at 6:00 a.m >> eamon javers at the white house for us let's get a check of the white house reaction because initially we did see a market reaction the dow dropping more than 130 point, closing near the lows of the session and the reaction was really seen in the u.s. dollar before recovering some of those losses so the question here, we know about the trade war, of course we are back to see a trough-led war on the fed what could that mean for

criticized for that criticize the fed all the time you might remember he said to the former chair at janet yellen that she should be ashamed of her low interest rate policy but of course being president is a very different situation and it's highly unconventional to see a u.s. president make this kind of comment now qana miss warren that it can undermine confidence in the markets they would generally recommend against saying anything to this effect and the concern here is that comments like what we've just heard trump make this week are that he would be undermining the independence of key institutions in the united states clearly this is a president who has looked so perhaps he hasn't looked at the presidential playbook and said i just go he's away because everywhere he looks he's just making up new rules as he goes along making up new conventions as he goes along. yes well we see that all the time not just when it comes to economic policy and in this instance i think perhaps we're seeing it at this particular moment as a kind of distraction from the very terrible week that trump has had in other

jonathan: iain stealey, do you have a better understanding under chair powell than you did under chair yellen: i think the reaction front is going to be very similar. he is going to look at the data, he is going to analyze what is going on, and the ultimately the view is that inflation is going to remain fairly muted. i could pick up near term, but longer-term u.s. inflation is going to be low, and that is going to be kept down by all of the cyclical structural impacts of low-cost providers, the amazon's of this world, and low inflation globally. you know, there is no inflation across europe. there is limited inflation across areas like japan, and that is going to weigh down on global inflation. think they're going to monitor the data, but they are not going to feel they have to go even quicker at the moment. i think they are going to look through those. jonathan: and given here in the united states, the output numbers are so good, that cannot be a problem. ira: it is not a problem. so that is one of the ironies here. you can have real growth that is ok, low inflation. it is really kind of --

bernanke and yellen made that up. the dual mandate is phony.been saying that since before the 2016 election. the fed statute is much more complicated. i think powell is trying to lean into that and explain that. i would want to zero in on that. powell just gave this speech a few weeks ago in portugal talking about maximum employment in the context of price stability and financial stability. very different from the past. alix: i would give you $20 if somebody actually asked that. peter: i am not expecting it. alix: peter fisher, dartmouth college tuck school of business senior fellow. big news of the day comes from goldman sachs, the stock down by 3/10 of 1%. david solomon will take the reins of the company as ceo on october 1 as lloyd blankfein becomes senior chairman in that transition. erik schatzker joins me. what did you learn over the last 20 minutes? erik: not a lot that we did not know already because this was telegraphed. the big question was the timing. how long would it take for david solomon to be put into that job? lloyd blankfein b

how is kind of a recipe for you get wages up and this is a recipe for why janet yellen -- it was easier for her to say i'm going to run the economy hot and let labor input recover. it might be tougher for jay powell to do that. david: thank you both very much for being here. you can find all the charts we just used and more by running gt tv on your terminal. coming up, more on the latest development's in the u.s.-china trade war with the u.s.-china business council vice president. live from new york, this is bloomberg. ♪ david: the united states went ahead with its tariffs on imports from china as promised and that was at midnight washington time. china responded immediately with similar tariffs of its own on u.s. goods. the chinese ago premier spoke in sofia, bulgaria, saying, "china will never start a trade war but will take measures in response to others." we welcome now our colleague from beijing, m emma o'brien. was this essentially priced and from the chinese point of view that they knew this was coming? see from the market reaction that even beyond china that this was pretty

janet yellen talked about the benefits of running a hot economy. economy on the back of fiscal policy. but i'm not against it. but the big thing for me is that fiscal policy be ready, politically as well as economically, be used in the next economic downturn. as i look out longer-term, the biggest risk i see to the fabric of our democracy is if we have to fight the next recession with monetary policy alone, because the consequences of having done this last time are not good. it has polarized our society. ♪ minor, the cio of guggenheim's investment division, says he believes the next recession is coming within the two years. is that what your time is? >> i think it could be sooner. what you see the fed doing now is tightening monetary conditions, and in the postwar , the stat is something like six out of the last eight tightening cycles have been followed within the 18 months of a recession and lowdown, because money supply is constrained, it has an impact on the real economy. moreover, i think the uncertainty created by the issident's tariff initia

is ank jay powell different kind of -- he's not bernanke and he's not janet yellen.e's easy to understand. i'm pretty comfortable he knows what the risks are out here. they are not going to move to shut this thing down. not going to hike too much. i don't think they're going make a mistake this year but certainly as what happens in many cycles, eventually the fed will make a mistake hike rates too much. year.t think it's this haidi: we spent great deal of time worrying about trade tensions. we looking atng tariffs's saying that only coming in list of concerns calls.in conference much more of higher is really the dollar. of given we had this leg up in the trading session, is this an indication that this is the next kind of bit of strength that we about?be concerned is it just a short term? >> when you look at the dollar, you look at the dollar index the euro, for at me if dollar yen went higher, that wouldn't surprise me. overall, i think the dollars will top in here. it's made pretty good run quickly. a top inng to find here. for us, as far as where we think the doll

the financial services committee, chairwoman yellen talking about persistent economic headwinds, those headwinds are abated because of the regulatory reform we have done, the tax reform we have done, this is all very good news for the small business community and the american consumer. >> how optimistic are you for your fellow republicans heading into the midterms? >> we were just beginning the august recess, we talk to our voters and see what is happening and continue to do things the american people look us to do, we want to secure the border, take care of immigration, we had a good bill a couple weeks ago. we came up short, we will work on that. people want the borders secured, we need to know who is coming into this country. the bill we had was a strong bill, we hope we can move forward on that. it is helping the economy on the energy sector. this is good news for the american people. do you want to go to a more stagnant economy or a healthier economy. hard-working taxpayers want a healthy economy, more jobs, higher wages, we don't want to pay more taxes, that is the chance nancy p

these quits feature on janet yellen's dashboard.hing is a better harbinger of higher wages than people feeling their boss to take this job and shove it. financials looked horrible today. the xlx is down from its january 26 high. that's when he went to davos and threw down the gauntlet on the global elite establishment. at some point it will make a deesive break. i don't know what direction. but if it doesn't go up, it's in danger of big collapse on its support. quarterly earnings. all of these things are down this year. city bank is down 8%. wells fargo is off almost 7%. financials are expected to see revenues up 4.5%. so there are big hopes overall for earnings. we had a monster first quarter. wall street look for lightning to strike again. you can see what we got in the first quarter. it all begins friday. i will say three days ago, i'm excited but i have got to tell you, there have been so few earnings warnings, that's a great sign going into friday. at the end of the day it's about forward guidance. we are going to leave it ther

start getting nervous about the future recession >> i want to see jay powell point back to janet yellen td rates, she drew first blood. have a great day appreciate it. >> you, too. >> president trump will head to europe next week for a nato summit ahead of that gathering hadley gamble was able to catch up with the nato secretary-general this morning in a first on cnbc interview. it's a big one hadley, what did you learn >> as you know we have had no shortage of tough talk for president trump when it comes to nate so allies he says the united states will no longer be the world's biggie tank bank and that ally also have to pay their fair share when it comes to defense spending or else i had a chance to catch up with the nato secretary-general and asked how this will play out especially against this back drop of europe peep tariff an ta trade war. >> you're right there are some real disagreements on issues like trade, but also on climate change and the iran nuclear deal these are serious disagreements. at the same time there's been disagreements between nato allies before. the strength of

. >> i'm thinking janet yellen ben bern naeng allen green span is also a former fed chairman who could up you might expect them to speak at some point. i think powell wants to stay out of this if he can. i think increasingly it's becoming difficult for them to do it. i think the reaction of the federal reserve is one where they keep going and stick to their knitting in terms of their intentions for this year right now that december rate hike has now become a political litmus test for the federal reserve. >> yes. >> and what's really interesting is president trump may have made that second rate hike more likely now because the federal reserve. >> that was your point. >> the federal reserve might have to do this. >> to prove. >> to prove independence. >> can we just highlight now crossing the wires u.s. dollar index slipping to four-day low after cnbc reports the president is worried that fed will raise rates twice this year. >> trump he likes. >> he is getting what he wants four-day low by the way is basically one-year low for all intents and purposes but gym, a goo good point. the more

chair yellen had an idea that wages could rise equal to inflation plus productivity. that would be noninflationary wage gains i'm sure chairman powell pretty much has the same idea that means there's a lot of scope for wages to move without the federal reserve really accelerating its rate hikes. he said look we'll raise rates gradually. that's all good. the economy is solid so with all of that, there's no sense at all of any panic or acceleration in his talk >> i wonder what your perspective is as we watch the ten-year note yield turn lower it's a tick or two lower i mentioned how steph came into today expecting possibly a more hawkish fed chair. did you as well? >> no, steph should have called me i don't understand steph, you have a question on the fed, give me a shout i'm happy to talk. >> it sounded like he was on autopilot. >> he's not -- >> no, no. after today i don't think so i think people were concerned going into the meeting today that they were on autopilot, no matter what the economy did or what was happening with the yield curve. today it sounds like a lit

remind our audience when president obama was in office he regularly attacked then fed chair janet yellentificially keeping interest rates low to serve president obama, and keep the economy humming. >> now he's president. >> now he's asking his fed chair to do the same thing. we really to focus on the fact that wages are down. the bls numbers from june 2018 are down. these are the most vulnerable workers. while the tax cuts is lined the pockets of ceos and executives in corporate america and shareholders in the buybacks, those who need it most are getting lower. >> i run into people, well, the tax cuts are working. sure, for some people. they're working really, really well. exactly the people we sat here for months telling people they were going to work for. they're not working for the forgotten american who thought that donald trump was going to get them a better deal. that's worth remembering. >> not yet. >> for the first time ever a top secret fisa warrant has been made public. we'll look at the document related to the fbi's wiretapping of carter page. we'll describe how carter page fi

during one of her final appearances in front of congress, i spoke with janet yellen about the opioid epidemic and its connection to not just economictcomes but unemployment outcomes. the impact of opioids on the labor participation rate, which has declined over the last decade, she agreed there was a connection and noted surveys many prime age individuals were not actively participating in the labor market are involved in prescription drug use. i look at these people we have , the next doctors, the next electricians, the next nurses, what do you see as the impact of the opioid epidemic on our workforce participation and economy? chair powell: it is a terrible families and for individuals involved, and from an economic standpoint, some high percentage of the primates force,not in the labor particularly primates males are taking painkillers of some kind. i think the number that alan krueger is a professor who came up with 44% of them, so it is a big number and having a terrible human toll on our communities and it matters a lot from the labor force per dissipation >> and economic activ

donald trump basically fires janet yellen, the most dovish fed chair in our lifetime.t is what he wants. he fired her. julie: i'm so glad great got that point. lisa: there are interesting aspects. the most interesting, markets just don't seem to be moving just yet. .hank you so much, greg we always appreciate your insights. coming up, a warning shot at bank stock. -- advising investors to ditch the big tech names. this is bloomberg. ♪ julie: too much love for tech. warning toout a investors to exit facebook, apple, amazon, netflix and google. the so-called faang. is there something there this time? some charts with us ahead of a busy earnings week. earnings, there doesn't seem to be a lot of concern. >> one thing i would like to pull up is these threads between the implied volatility versus calls. we have is the top panel. alphabet.ebook, those are subdued slightly. the skew on qqq q is elevated. it is like strategists are saying there might be some danger in tech but certainly not the stocks i know and love. lisa: nobody wants to admit there is actually danger. you ca

bernanke and yellen in particular got dragged into it because we went through the great recession. >>t's an art form for this administration. shery: you mentioned senator warren yesterday but that was one of the few times that he actually got really political and these democratic senators pushing mr. powell on deregulation what that will do to the financial markets and so forth. did we see that today as well, especially when it came to maybe the volcker rule being eased? what's that -- because that's what wall street has been focused on. michael: usually you get more of it in the house because they're more polarized in their positions. everybody has been relatively calm about the whole thing them real question for republican they passed the banking deregulation legislation and want to make sure that the fed is implementing it as quickly as possible. and powell said basically, we're doing that. there is a little bit of concern on the democratic side and the old shibboleth about the banks being the enemy of the people, that's come up a little bit. but nobody has staked out a harsh polit

janet yellen talked about the benefits of running a hot economy.n the back of fiscal policy, but i'm not against it. the big thing for me is that fiscal policy be ready politically, as well as economically be used in the next economic downturn. as i look out longer-term, the biggest risk i see to the fabric of our democracy is if we have to fight the next recession with monetary policy alone. those of the consequences of having done it last-minute, and they are not good. mike: we have about 30 seconds left read you heard both sides on trade and tariffs. the worry about where we are? [sigh] i don't think it is a productive game for the united states to be engaged in. i wish mr. trump was not doing this, that at the same time, i do not think the consequences are going to be a disaster. , thinkaul mcculley you so much for joining us. back to you in new york. thank you to mike and paul mcculley. this is bloomberg. ♪ scarlet: "what'd you miss?" rallying u.s. stocks led by tech names. jpmorgan and citigroup kickoff earnings. julie: we will see if they ca

the traditional estimate used i yellen had the neutral rate plus zero.he range looks at an average around .8. fed'suggests in the thinking maybe another four rate rises at leased. that could be too much for the economy particularly even the effect on long-term yields from repacked ration of money back into the states and the possibility of curve inversion. inus: on one of the things was looking at this morning was global inflation and how that has played out. i found it surprising. i was quite shocked. europe trolleys in their behind that and comes in at number two. global inflation is at 2.77%. the same way larry things, your complacent about markets. making -- missing something in the global inflation picture? >> it seems it is a little stronger than the markets are willing to give it credit for. it depends on what is in there and if one discounts the effects of the potential for trade wars which could be, provide a positive shelter inflation which would diminish quickly. anna: we have the new zealand inflation data resulting in new currency. to look a

dodd-frank, janet yellen's balance sheet and obama tax policies were enforced until the beginning of this year. in fact, the fed policies and the securities regulation remain pretty much unchanged since the obama administration. the chairman of this committee urges you to abandon all of the unconventional tools, while taking credit for the good economy that is in part a result of your unconventional tools. i would say keep your balance sheet as big as it was when we achieved the economic growth that is so good the democrats and republicans are fighting ver who gets credit. and certainly, do not cut your balance sheet until the chairman tells you how he's going increase taxes to replace the $80 billion of profit you gave us last year because you had a big balance sheet. the chair talks about the inflation rate, chair of the committee, you ought to have a oal of 2.5%, not 2%. the law draws a 3% objective or maximum for inflation and for unemployment. so unemployment is still too low, and inflation is still too low, and if we have a losser economic policy, maybe we'll get somewhat highe

dodd/frank, janet yellen's balance sheet and president obama's tax rules were in force until this year. in fact, the fed policies and the securities regulation remain pretty much unchanged since the obama administration. the chairman of this committee urges you to abandon all of the unconventional tools while taking credit for the good economy that is, in part, a result of your unconventional tools. i would say keep your balance sheet as big as it was when we achieved the economic growth that is so good that democrats and republicans are fighting over who gets credit. and certainly do not cut your balance sheet until chairman hensarling tells you how he's going to increase taxes to replace the $80 billion of profit you gave us last year because you had a big balance sheet. the chair talks about the inflation rate, chair of this committee. you also to have a goal of 2.5%, not 2%. the law that we passed in 1978 draws a 3% objective or maximum for inflation and for unemployment so unemployment is still too high, inflation is too low. if we have a looser economic policy, maybe we'll get so

said -- and i don't know the way powell thinks about this yellen had said 3% to 4% wage growth is nottion. we talked about this on friday accuracy and productivity, that's non-inflationary wage growth that's what you should be getting. so we're well below that at 2.74%. there's room to grow when it comes to wages and that should happen in the next several months if we stay at these low unemployment rates. >> all right found it for you if america's divided, so is europe it's a polish philosopher politician talking about nato. i love the term, degenerate liberalism -- what no it's said in a philosophical way. but i'm sending this to you. >> okay. >> the whole thing, the more i read it, it was like you can describe the whole world on this piece. why'd you skip that wione? >> okay. you want to know what i did this weekend. >> you took the lead editorial which is anti-trade and you just love that. but you don't -- >> i wish the trump administration was reading a little bit of the op-ed section of "the wall street journal. >> it was weird. it said degenerate liberal and it was a picture of

it's different from yellen >> it's a lot different. he's more pragmatic. get a 0.4% jump in hourly average earnings, that's still 2.9% the fed wants those wages to be rising between 3% and 4% we did get a little spooked at 2.9% we've seen that number before. >> one thing is that number there. yellen used to talk about it i don't know that powell has but the right way to think about non-inflationary wage gains -- right? we keep using this term like somehow rising wages is a negative it's not those two numbers -- maybe karen wants to comment on those -- are non-inflationary wage gains. it is okay for wages to goup along with the inflation rate and productivity rate nap gives you a 3% to 4% window of wage gains. >> karen, you get the last word. >> right productivity is the key. and i think we are going to start to see some productivity i'm expecting 2% productivity in the second quarter we haven't seen that number in a long time. that's good. that's non-inflationary wage gain due to productivity that's because of the capex boom we're seeing haven't been talki